Parents never stop worrying about their kids.
According to research from TD Insurance, they worry about all aspects of their lives, including their financial security (79%), health (79%) and educations (76%).
As a result, the vast majority of Canadian parents (88%) agrees having the right amount of life insurance gives them peace of mind. They know any children will be financially secure in the event that something happened to them or their partner.
Read: Insurance and children
The only problem is more than half of parents (56%) don’t trust their policies will leave enough money to financially support their children as they grow up.
So, minor recommends they consider the following expenses when calculating how much coverage they need:
- Current debts: By purchasing enough life insurance to cover your mortgage and other personal debts, assets like your home will be retained by your remaining family.
- Final expenses and taxes: Consider funeral expenses, plus any tax you may owe following your death. This can include any capital gains or inheritance taxes.
- Childcare and education costs: A four-year post-secondary degree away from home can cost up to $84,000, so budget for his future cost. Also, if you’re the sat-at-home spouse of small children, consider what additional childcare expenses will need to be covered in your absence.
- Ongoing income for your family: Your family members will want to maintain their current lifestyles, and even smaller costs can really add up.
For those parents who don’t own life insurance, half (47%) say it’s because they can’t afford it, while 26% think it’s unnecessary.
Minor argues life insurance doesn’t have to be costly. He says, “One of the advantages of purchasing life insurance early is it’s more affordable; premiums are based on life expectancy, which naturally decreases over time.”
He adds, “A healthy, non-smoking, 35 year-old female can typically obtain term life coverage worth $100,000 for as little as $11 per month.”